Airtel Africa, Julius Berger, Fidelity Bank among stocks to watch this week

This week’s stocks to watch list consist of Airtel Africa, Julius Berger and Fidelity Bank, as the stock market resumes its weekly activities.

Ripples Nigeria stocks watchlist is a selection of stocks monitored for viable trading or investing opportunities. An investor may casually generate a list of equities for investment purposes. But we have taken the pain to do that based on certain parameters in order to save you that hassle.

Kindly note that Ripples Nigeria Stocks Watchlist is not a buy, sell or hold recommendation. It is advisable to consult your financial advisor before making any investment decision.

Airtel Africa

Airtel Africa is opening this week in the losers’ corner after it closed last week as one of the top 10 decliners, occupying the eighth position.

The shareholders of Airtel Africa saw their investment in the telecommunications company fall by 6.02 per cent within five days.

The loss was driven by low demand for Airtel Africa’s shares, resulting in a decline in the firm’s stock value, which closed last week at N1,560, against its opening price of N1,660.

Last week’s loss could trigger a sell-off among shareholders this week or encourage investors to wait it out in order to buy the network provider’s shares at a lower price than it closed last week.

Julius Berger

Julius Berger is taking up a N30 billion debt to stay in business in Nigeria. The company raised the loan through Commercial Paper issuance.

According to Julius Berger, the loan will be used to fund its short-term working capital, and diversify into economically significant sectors such as the cashew processing business.

READ ALSO:Airtel Africa, Champion Brew, John Holt join stocks to watch list

This means expenses from the cashew processing business will be funded by a loan, while part of the earnings will be used to repay its debt, reducing gains from the business.

Raising debt to finance a venture is part of business, as it could increase Julius Berger’s growth prospect or future earnings, however, with debt piling up, it could also reduce investment value for shareholders, as debt will be paid out of the net profit, from which dividends are also paid from.

Fidelity Bank

Fidelity Bank shareholders took a hit in their investment last week, as investors’ interest in bank stocks dropped as attacks on Deposit Money Banks (DMB) continue over Naira scarcity.

Naira scarcity resulted from the Naira redesign policy of the Central Bank of Nigeria (CBN), following the failure in implementing it due to the inability to print sufficient currencies.

Banks like Fidelity Bank are bearing the brunt in the capital market, as investors react negatively amid the burning of bank buildings, Auto Teller Machines (ATMs) and early closure of business.

The destruction of bank properties and early closure of operations could affect margins or earnings, and this could continue to affect investors’ confidence in bank stocks.

Last week, low demand for Fidelity Bank stocks resulted in the firm’s share losing -14.70 per cent value, and with CBN unable to end the Naira scarcity, Fidelity Bank might be at risk of investors’ apathy, which will negatively affect shareholders’ investments.

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